Damodar N. Gujarati
United States Military Academy, West Point
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BASIC ECONOMETRICS Published by McGraw-HiII/lrwin, a business unit of The McGraw-Hili Companies, Inc. 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2003, 1995, 1988, 1978, by The McGraw-Hili Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hili Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States.
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ISBN: 978-0-07-233542-2 MHID: 0-07-233542-4 ISBN: 978-0-07-112342-6 MHID: 0-07-112342-3 Publisher: Gary Burke Executive sponsoring editor: Lucille Sutton Developmental editor: Aric Bright Marketing manager: Martin D. Quinn Associate project manager: Catherine R. Schultz Senior production supervisor: Lori Koetters Senior designer: Jenny EI-Shamy Media producer: Melissa Kansa Supplement producer: Erin Sauder Cover design: Jamie O'Neal Typeface: 10/12 New Aster Compositor: Interactive Composition Corporation Printer: R. R. Donnelley & Sons Company
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ABOUT THE AUTHOR
After teaching for more than 28 years at the City University of New York, Damodar N. Gujarati is currently a professor of economics in the Department of Social Sciences at the U.S. Military Academy at West Point, New York. Dr..Gujarati received his M.Com. degree from the University of Bombay in 1960, hIs M.B.A. degree from the University of Chicago in 1963, and his Ph.D. degree from the University of Chicago in 1965. Dr. Gujarati has published extensively in recognized national and international journals, such as the Review of Economics and Statistics, the Economic Journal, the Journal of Financial and Quantitative Analysis, the Journal of Business, the American Statistician, and the Journal of Industrial and Labor Relations. Dr. Gujarati is an editorial referee to several journals and book publishers and was a member of the Board of Editors of the Journal of Quantitative Economics, the official journal of the Indian Econometric Society. Dr. Gujarati is also the author of Pensions and the· New York City Fiscal Crisis (the American Enterprise Institute, 1978), Government" and Business (McGraw-Hill, 1984), and Essentials of Econometrics (McGraw-Hill, 2d ed., 1999). Dr. Gujarati's books on econometrics have been translated into several languages. Dr. Gujarati was a Visiting Professor at the University of Sheffield, U.K. (1970-1971), a Visiting Fulbright Professor to India (1981-1982), a Visiting Professor in the School of ManagemeiJt of the National University of Singapore (1985-1986), and a Visiting Professor of Econometrics, University of New South Wales, Australia (summer of 1988). As a regular participant in USIXs lectureship program abroad, Dr. Gujarati has lectured extensively on micro- and macroeconomic topics in countries such as Australia, China, Bangladesh, Germany, India, Israel, Mauritius, and the Republic of South Korea....
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